EATON TO ACQUIRE COOPER INDUSTRIES TO FORM PREMIER GLOBAL POWER MANAGEMENT COMPANY

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1 For Release: 9.00 a.m. Eastern, May 21, 2012 Not for release, publication or distribution, in whole or in part, in, into or from a Restricted Jurisdiction EATON TO ACQUIRE COOPER INDUSTRIES TO FORM PREMIER GLOBAL POWER MANAGEMENT COMPANY COMPLEMENTARY PRODUCTS AND MARKETS CREATE OPPORTUNITIES FOR GROWTH IN GLOBAL ELECTRICAL INDUSTRY COOPER SHAREHOLDERS TO RECEIVE $39.15 PER SHARE IN CASH AND IN ORDINARY SHARES, FOR 29% PREMIUM; TRANSACTION EQUITY VALUE OF $11.8 BILLION TRANSACTION EXPECTED TO BE ACCRETIVE TO EPS IN 2014 CLEVELAND, OHIO and DUBLIN, IRELAND (May 21, 2012) Diversified industrial manufacturer Eaton Corporation (NYSE: ETN) ( Eaton ) and electrical equipment supplier Cooper Industries plc (NYSE: CBE) ( Cooper ) today announced they have entered into a definitive agreement under which Eaton will acquire Cooper in a transaction that will significantly increase the capabilities and geographic breadth of the combined company s power management portfolio and electrical business. Founded in 1833, Cooper is a leading supplier of electrical equipment with a wide range of electrical products including electrical protection, power transmission and distribution, lighting and wiring components. This suite of electrical products enhances customer energy efficiency and safety across a number of end markets globally. Founded in 1911, Eaton is a global power management company. Its electrical business is a global leader in power distribution, power quality, control and automation, power monitoring, and energy management products and services. Eaton is positioned to answer today s most critical power management challenges through its electrical, aerospace, hydraulics and vehicle businesses. At the close of the transaction, which is expected in the second half of 2012, Eaton and Cooper will be combined under a new company incorporated in Ireland, where Cooper is incorporated today. The newly created company, which is expected to be called Eaton Global Corporation Plc or a variant thereof ( New Eaton ), will be led by Alexander M. Cutler, Eaton s current chairman and chief executive officer. This compelling combination of Eaton s power distribution and power quality equipment and systems with Cooper s diversified component brands, global reach and international distribution creates a game changer to serve the electrical industry, said Cutler. We re excited about bringing together two great companies to create shareholder value and continue our global growth. This combination significantly expands our ability to better serve our customers with their demands for critical energy saving technologies as they address the impact of the world s growing energy needs. We are extremely pleased to become part of Eaton s global electrical business, said Kirk Hachigian, chairman and chief executive officer of Cooper. This combination creates endless opportunities to accelerate growth and serve our global customers through combining technology, distribution, penetrating important vertical industries and entering new emerging markets. The two companies are a perfect fit in every respect. The combined company would have had historical 2011 revenues of $21.5 billion and EBITDA of $3.1 billion, and it is expected to enhance shareholder value by: Leveraging complementary product offerings between Eaton and Cooper s electrical businesses. 1

2 Accelerating long-term growth potential by increasing exposure to attractive end markets and service opportunities. Better satisfying customer global demands for energy efficiency and electrical safety. Generating approximately $535 million in expected annual synergies by The Acquisition is expected to be accretive to operating earnings per share by $0.35 in 2014 and by $0.45 in Excluding the non-cash expense related to the amortization of intangibles arising from purchase accounting, the Acquisition is expected to be accretive to operating earnings per share by $0.65 in 2014 and by $0.75 in The Acquisition will be financed with a mixture of cash, debt, and equity. Under the terms of the Transaction Agreement, Cooper Shareholders will receive $39.15 in cash and shares of New Eaton for each Cooper share. Based on the Closing Price for Eaton common stock on Friday May 18, 2012, Cooper Shareholders will receive cash and shares valued at $72.00 per share, representing a premium of 29 percent and a total transaction equity value of approximately $11.8 billion 3. Eaton Shareholders will receive one share of the new company for each share of Eaton that they own upon closing. The transaction will be taxable, for U.S. federal income tax purposes, to both the Eaton Shareholders and the Cooper Shareholders. Eaton Shareholders are expected to own approximately 73 percent of the combined company while legacy Cooper Shareholders are expected to own approximately 27 percent. Shares of New Eaton will be registered with the U.S. SEC and are expected to trade on the New York Stock Exchange under the ticker symbol ETN. Eaton has secured a $6.75 billion fully underwritten bridge financing commitment from Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc. and Citibank, N.A. to finance the cash portion of the Acquisition. Eaton plans to later refinance these bridge borrowings through a new term debt issuance, use of cash on hand, and the possible sale of assets. APPROVALS The combination is subject to the terms of a Transaction Agreement among Eaton, Cooper, New Eaton and certain other parties. The acquisition of Cooper by New Eaton will be effected by means of a scheme of arrangement under Irish law pursuant to which New Eaton will acquire all of the outstanding shares of Cooper from Cooper Shareholders for cash and shares (the Acquisition ). The Acquisition will be subject to the terms and conditions to be set forth in the scheme of arrangement document to be delivered to Cooper Shareholders. To become effective, the scheme of arrangement will require, among other things, the approval of a majority in number of Cooper Shareholders, present and voting either in person or by proxy at a special Cooper Shareholder meeting, representing 75% or more in value of the Cooper shares held by such holders. Following the requisite Cooper Shareholder approval being obtained, the sanction of the Irish High court is also required. In addition, the Transaction Agreement must be adopted by shareholders holding two-thirds of the outstanding voting shares of Eaton in a special shareholder meeting. The Acquisition, which is unanimously recommended by the Boards of Directors of both companies, also is subject to receipt of certain regulatory approvals and certain other conditions, as more particularly set out in Appendix III to this announcement. CONFERENCE CALL WITH EATON AND COOPER MANAGEMENT AT 10:00 AM EASTERN, MAY 21, 2012 Eaton s and Cooper s conference call to discuss this transaction is available to all interested parties as a live teleconference today at 10 a.m., Eastern time, in the U.S. at the following phone numbers: U.S.: ; international: The confirmation number is This news release can be accessed under 1 The total expected annual synergies of $535 million comprise $375 million of pre-tax operating synergies, and $160 million of global cash management and resultant tax benefits related to the combined company being incorporated in Ireland. 2 The statement that this acquisition is earnings accretive should not be interpreted to mean that the earnings per share in the current or any future financial period will necessarily match or be greater than those for the relevant preceding financial period. 3 The fully diluted share capital of Cooper assumes full exercise of the outstanding Cooper share options and vesting of outstanding share awards under the Cooper Share Plans. 2

3 its headline on the Eaton home page at Also available on the website prior to the call will be a presentation on this transaction that will be covered during the call. ABOUT EATON: Eaton is a diversified power management company with more than 100 years of experience providing energyefficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power. With 2011 revenues of $16.0 billion, Eaton is a global technology leader in electrical components, systems and services for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. Eaton has approximately 72,000 employees and sells products to customers in more than 150 countries. ABOUT COOPER: Cooper is a diversified global manufacturer of electrical components and tools, with 2011 revenues of $5.4 billion. Founded in 1833, Cooper s sustained success is attributable to a constant focus on innovation and evolving business practices, while maintaining the highest ethical standards and meeting customer needs. Cooper has seven operating divisions with leading positions and world-class products and brands including Bussmann electrical and electronic fuses; Crouse-Hinds and CEAG explosion-proof electrical equipment; Halo and Metalux lighting fixtures; and Kyle and McGraw-Edison power systems products. With this broad range of products, Cooper is uniquely positioned for several long term growth trends including the global infrastructure build out, the need to improve the reliability and productivity of the electric grid, the demand for higher energy-efficient products and the need for improved electrical safety. In 2011, 62% of total sales were to customers in the industrial and utility end-markets and 40% of total sales were to customers outside the United States. Cooper has manufacturing facilities in 23 countries as of FOR MORE INFORMATION: Eaton Cooper Gary Klasen (Media) + 1 (216) David Barta (Senior Vice President and CFO) Don Bullock (Investors) + 1 (216) (713) Citi North America Goldman Sachs North America Niraj Shah Dusty Philip Sameer Singh UK & Ireland UK & Ireland Basil Geoghegan Michael Casey Morgan Stanley North America William Dotson +1 (212) Thomas M. Miles +1 (212)

4 UK & Ireland Colm Donlon The directors of Cooper accept responsibility for the information contained in this announcement relating to Cooper and its Associates and the directors of Cooper and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the directors of Cooper (who have taken all reasonable care to ensure such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Eaton accept responsibility for the information contained in this announcement, other than that relating to Cooper, its Associates and the directors of Cooper and members of their immediate families, related trusts and persons connected with them. To the best of the knowledge and belief of the directors of Eaton (who have taken all reasonable care to ensure such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. Citi and Morgan Stanley are acting as joint financial advisers to Eaton and New Eaton and no one else in connection with the Acquisition and will not be responsible to anyone other than Eaton and New Eaton for providing the protections afforded to clients of Citi and Morgan Stanley or for providing advice in relation to the Acquisition, the contents of this announcement or any transaction or arrangement referred to herein. Goldman Sachs is acting exclusively for Cooper and no one else in connection with the Acquisition and will not be responsible to anyone other than Cooper for providing the protections afforded to clients of Goldman Sachs or for providing advice in relation to the Acquisition, the contents of this announcement or any transaction or arrangement referred to herein. The full text of the Conditions is set out in Appendix III. NO OFFER OR SOLICITATION This communication is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC New Eaton will file with the SEC a registration statement on Form S-4 that will include the Joint Proxy Statement of Eaton and Cooper that also constitutes a prospectus of New Eaton. Eaton and Cooper plan to mail their respective shareholders (and Cooper Equity Award Holders for information only) the Joint Proxy Statement/prospectus (including the Scheme) in connection with the transactions. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING THE SCHEME) AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT EATON, COOPER, NEW EATON, THE TRANSACTIONS AND RELATED MATTERS. Investors and security holders will be able to obtain free copies of the Joint Proxy Statement/prospectus (including the Scheme) and other documents filed with the SEC by New Eaton, Eaton and Cooper through the website maintained by the SEC at In addition, investors and shareholders will be able to obtain free copies of the Joint Proxy Statement/prospectus (including the Scheme) and other documents filed by Eaton and New Eaton with the SEC by contacting Eaton Investor Relations at Eaton Corporation, 1111 Superior Avenue, Cleveland, OH or by calling +1 (888) 4

5 , and will be able to obtain free copies of the Joint Proxy Statement/prospectus (including the Scheme) and other documents filed by Cooper by contacting Cooper Investor Relations at c/o Cooper US, Inc., P.O. Box 4466, Houston, Texas or by calling +1 (713) PARTICIPANTS IN THE SOLICITATION Cooper, Eaton and New Eaton and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the respective shareholders of Cooper and Eaton in respect of the transactions contemplated by the Joint Proxy Statement/prospectus. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the respective shareholders of Cooper and Eaton in connection with the proposed transactions, including a description of their direct or indirect interests, by security holdings or otherwise, will be set forth in the Joint Proxy Statement/prospectus when it is filed with the SEC. Information regarding Cooper's directors and executive officers is contained in Cooper's Annual Report on Form 10-K for the year ended December 31, 2011 and its Proxy Statement on Schedule 14A, dated March 13, 2012, which are filed with the SEC. Information regarding Eaton's directors and executive officers is contained in Eaton's Annual Report on Form 10-K for the year ended December 31, 2011 and its Proxy Statement on Schedule 14A, dated March 16, 2012, which are filed with the SEC. EATON SAFE HARBOR STATEMENT This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Eaton, New Eaton, the Acquisition and other transactions contemplated by the Transaction Agreement, our acquisition financing, our long-term credit rating and our revenues and operating earnings. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Eaton or New Eaton, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied by words such as anticipate, believe, plan, could, estimate, expect, forecast, guidance, intend, may, possible, potential, predict, project or other similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside of our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include adverse regulatory decisions; failure to satisfy other closing conditions with respect to the Acquisition; the risks that the new businesses will not be integrated successfully or that we will not realize estimated cost savings and synergies; our ability to refinance the bridge loan on favorable terms and maintain our current long-term credit rating; unanticipated changes in the markets for our business segments; unanticipated downturns in business relationships with customers or their purchases from Eaton; competitive pressures on our sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; new laws and governmental regulations. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect our business described in our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents filed from time to time with the SEC. We do not assume any obligation to update these forward-looking statements. No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for Eaton. COOPER SAFE HARBOR STATEMENT This press release may contain forward-looking statements concerning the Acquisition, our long-term credit rating and our revenues and operating earnings. These statements or disclosures may discuss goals, intentions and expectations as to future trends, plans, events, results of operations or financial condition, or state other information relating to Cooper, based on current beliefs of management as well as assumptions made by, and information currently available to, management. Forward-looking statements generally will be accompanied 5

6 by words such as anticipate, believe, could, estimate, expect, forecast, guidance, intend, may, possible, potential, predict, project or other similar words, phrases or expressions. These statements should be read with caution. They are subject to various risks and uncertainties, many of which are outside of our control. Factors that could cause actual results to differ materially from those in the forwardlooking statements include adverse regulatory decisions; failure to satisfy other closing conditions with respect to the Acquisition; the risks that the new businesses will not be integrated successfully or that we will not realize estimated cost savings and synergies; our ability to refinance the bridge loan on favorable terms and maintain our current long-term credit rating; unanticipated changes in the markets for our business segments; unanticipated downturns in business relationships with customers or their purchases from Cooper; competitive pressures on our sales and pricing; increases in the cost of material, energy and other production costs, or unexpected costs that cannot be recouped in product pricing; the introduction of competing technologies; unexpected technical or marketing difficulties; unexpected claims, charges, litigation or dispute resolutions; new laws and governmental regulations. We do not assume any obligation to update these forward-looking statements. No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statements be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for Cooper. DEALING DISCLOSURE REQUIREMENTS Under the provisions of Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules 2007, as amended (the "Irish Takeover Rules"), if any person is, or becomes, 'interested' (directly or indirectly) in, 1%, or more of any class of 'relevant securities' of Cooper or Eaton, all 'dealings' in any 'relevant securities' of Cooper or Eaton (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by not later than 3:30 pm (Dublin time) on the business day following the date of the relevant transaction. This requirement will continue until the date on which the Scheme becomes effective or on which the 'offer period' otherwise ends. If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an 'interest' in 'relevant securities' of Cooper or Eaton, they will be deemed to be a single person for the purpose of Rule 8.3 of the Irish Takeover Rules. Under the provisions of Rule 8.1 of the Irish Takeover Rules, all 'dealings' in 'relevant securities' of Cooper by Eaton or relevant securities of Eaton by Cooper, or by any of their respective 'associates' must also be disclosed by no later than 12 noon (Dublin time) on the business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed can be found on the Panel's website at 'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities. Terms in quotation marks are defined in the Irish Takeover Rules, which can also be found on the Irish Takeover Panel's website. If you are in any doubt as to whether or not you are required to disclose a dealing under Rule 8, please consult the Panel's website at or contact the Panel on telephone number ; fax number GENERAL This summary should be read in conjunction with the full text of this announcement. Appendix I to this announcement contains further details of the sources of information and bases of calculations set out in this announcement; Appendix II to this announcement contains definitions of certain expressions used in this 6

7 summary and in this announcement; and Appendix III to this announcement contains the Conditions of the Acquisition and the Scheme. The release, publication or distribution of this announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this announcement and all other documents relating to the Acquisition are not being, and must not be, released, published, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies involved in the proposed Acquisition disclaim any responsibility or liability for the violations of any such restrictions by any person. Any response in relation to the Acquisition should be made only on the basis of the information contained in the Proxy Statement or any document by which the Acquisition and the Scheme are made. Eaton Shareholders and Cooper Shareholders are advised to read carefully the formal documentation in relation to the proposed transaction once the Proxy Statement has been dispatched. This announcement is made pursuant to Rule 2.5 of the Takeover Rules. Pursuant to Rule 2.6(c) of the Takeover Rules, this announcement will be available to Eaton employees on Eaton s website ( and Cooper employees on Cooper s website ( 7

8 For Release: 9.00 a.m. Eastern, May 21, 2012 Not for release, publication or distribution, in whole or in part, in, into or from a Restricted Jurisdiction. EATON TO ACQUIRE COOPER INDUSTRIES TO FORM PREMIER GLOBAL POWER MANAGEMENT COMPANY COMPLEMENTARY PRODUCTS AND MARKETS CREATE OPPORTUNITIES FOR GROWTH IN GLOBAL ELECTRICAL INDUSTRY COOPER SHAREHOLDERS TO RECEIVE $39.15 PER SHARE IN CASH AND IN ORDINARY SHARES, FOR 29% PREMIUM; TRANSACTION EQUITY VALUE OF $11.8 BILLION TRANSACTION EXPECTED TO BE ACCRETIVE TO EPS IN 2014 RECOMMENDED ACQUISITION OF COOPER FOR CASH AND SHARES BY MEANS OF A SCHEME OF ARRANGEMENT UNDER SECTION 201 OF THE IRISH COMPANIES ACTS, INTRODUCTION The Board of Eaton and the Board of Cooper are pleased to announce that they have reached agreement on the terms of a recommended acquisition for cash and shares of the entire issued and to be issued share capital of Cooper by a new holding company, New Eaton, by means of a scheme of arrangement under Section 201 of the Irish Companies Act Under the terms of the transaction, each of Eaton and Cooper will be a wholly owned subsidiary of a new holding company incorporated in Ireland. This newly created company will be named Eaton Global Corporation Plc. The Board of Cooper, which has been so advised by Goldman Sachs, considers the terms of the Acquisition to be fair and reasonable. In providing its advice, Goldman Sachs has taken into account the commercial assessments of the Board of Cooper. Accordingly, the Board of Cooper unanimously recommends to Cooper Shareholders to vote in favour of the Acquisition and the Scheme, as the directors of Cooper who are Cooper Shareholders intend to do in respect of their own beneficial holdings. The Acquisition, by means of the Scheme, is subject to the Conditions set out in Appendix III. 2. CONSIDERATION Under the terms of the Transaction Agreement approved by both boards of directors of Cooper and Eaton, Cooper Shareholders will receive $39.15 in cash and New Eaton Shares for each Cooper Share they own upon closing of the Acquisition, and Eaton Shareholders will become shareholders of New Eaton receiving one New Eaton Share for each Eaton Share that they own upon closing of the Acquisition. The Consideration values the entire issued and to be issued share capital of Cooper at approximately US$11.8 billion 4 and implies an enterprise value multiple of 12.9x Cooper s reported EBITDA for the 12 month period ended March 31, The Consideration represents a 29% premium over Cooper s Closing Price on May 18, 2012, being the last Business Day prior to this announcement. The Consideration offers an immediate, certain liquidity event for Cooper Shareholders. 4 The fully diluted share capital of Cooper assumes full exercise of the outstanding Cooper share options and vesting of outstanding share awards under the Cooper Share Plans. 8

9 3. COOPER BACKGROUND TO AND REASONS FOR RECOMMENDING THE ACQUISITION The Cooper Board has on an ongoing basis discussed the long-term strategy of Cooper and strategic opportunities that might be available to enhance shareholder value, including additional investments in new growth opportunities, potential acquisitions, joint ventures and recapitalization options, as well as the possible sale of Cooper. Beginning in February 2012, senior management of Eaton and Cooper had a series of meetings regarding the possibility of an acquisition by Eaton of Cooper and the possible terms of such a transaction. In connection with a possible transaction, Cooper retained Goldman Sachs as its financial advisor and Wachtell, Lipton, Rosen & Katz and Arthur Cox as its legal advisors. During the months preceding the execution of definitive documentation for the Acquisition on May 21, 2012, the parties discussed and negotiated the transaction terms, conducted due diligence with respect to each other s businesses, consulted with the Panel, and Eaton arranged financing for the transaction. Also during this period, the Board of Cooper met, together with Cooper s senior management and its financial and legal advisors, on various occasions to consider the merits of a potential transaction with Eaton and the status of the discussions and negotiations between the parties. On May 18, 2012, the Cooper Board met, together with Cooper s senior management and financial and legal advisors, to consider proposed terms and drafts of definitive documentation for a proposed acquisition by Eaton of Cooper. At its meeting on May 20, 2012, Cooper s Board of Directors unanimously determined that the Transaction Agreement and the transactions contemplated therein, including the Scheme, were advisable for, fair to and in the best interests of Cooper and the Cooper Shareholders and declared advisable and determined that the terms of the Scheme were fair and reasonable. In reaching its determination to approve the Acquisition, the Cooper Board consulted with and received advice and reports from management and its financial and legal advisors, and drew on its knowledge of Cooper s business, assets, financial position, operating results, historical and current trading and the opportunities and challenges in its businesses and their industries, as well as information relating to Eaton. After giving consideration to these and a variety of other factors and risks, the Cooper Board unanimously determined to recommend that Cooper Shareholders vote in favor of the Acquisition. 4. COOPER RECOMMENDATION The Board of Cooper, which has been so advised by Goldman Sachs, considers the terms of the Acquisition to be fair and reasonable. In providing its advice, Goldman Sachs has taken into account the commercial assessments of the Board of Cooper. Accordingly, the Board of Cooper unanimously recommends to Cooper Shareholders to vote in favor of the Acquisition and the Scheme, as the directors of Cooper who are Cooper Shareholders intend to do in respect of their own beneficial holdings. 5. EATON BACKGROUND TO AND REASONS FOR THE ACQUISITION The combined company would have had historical 2011 revenues of $21.5 billion and EBITDA of $3.1 billion, and it is expected to create enhanced shareholder value by: Leveraging the strong strategic fit of two leading industrial companies with complementary technologies, product offerings, and many operational cost efficiencies and incremental revenue opportunities in the industrial and commercial markets; Expanding Eaton s geographic footprint to optimize manufacturing, customer service, and product distribution capabilities in faster growing market segments and economies; Accelerating Eaton s long-term growth potential by increasing exposure to faster growing end markets characterized by increasing customer demand for critical electrical power management technologies as they address the impact of the world s growing energy demands in both developed and emerging markets; Expanding market participation upstream into utility power distribution and downstream into load management and lighting control; Incorporating as an Irish company provides significant global cash management flexibility and associated financial benefits; and Generating approximately $375 million in expected annual pre-tax operating synergies and $160 million of 9

10 global cash management and resultant tax benefits by Further detail in respect of the background to and reasons for the Acquisition shall be included in the Proxy Statement. 6. THE ACQUISITION AND THE SCHEME The Acquisition will be effected by way of a Scheme of Arrangement pursuant to Irish law. Under the Scheme (which will be subject to the Conditions set out in Appendix III to this announcement and which will also be set out in the Proxy Statement) Cooper Shareholders will receive the Consideration in return for the cancellation of the Cancellation Shares. The Scheme of Arrangement is an arrangement made between Cooper and Cooper Shareholders under Section 201 of the Act and is subject to the approval of the Irish High Court. If the Scheme becomes effective, all Cancellation Shares will be cancelled pursuant to Sections 72 and 74 of the Act in accordance with the terms of the Scheme. Cooper will then issue new Cooper Shares to New Eaton in place of the Cancellation Shares cancelled pursuant to the Scheme and New Eaton will pay the Consideration for the Acquisition to former Cooper Shareholders. As a result of these arrangements, Cooper will become a wholly owned subsidiary of New Eaton. To become effective, the Scheme requires, amongst other things, the approval at the Court Meeting of a majority in number of Cooper Shareholders, present and voting either in person or by proxy, representing three-fourths (75%) or more in value of the Cooper Shares held by such holders, as well as the approval by Cooper Shareholders of resolutions relating to the implementation of the Scheme at an EGM to be held directly after the Court Meeting. Assuming the necessary approvals from the Cooper Shareholders have been obtained and all other conditions have been satisfied or (where applicable) waived, the Scheme will become effective upon delivery to the Registrar of Companies of a copy of the Court Order of the High Court sanctioning the Scheme together with the minute required by Section 75 of the Act confirming the capital reduction and registration of the Court Order and minute by the Registrar of Companies. Upon the Scheme becoming effective, it will be binding on all Cooper Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the EGM. The Acquisition is conditional on the Scheme becoming effective. The Conditions to the Acquisition and the Scheme are set out in full in Appendix III to this announcement. The implementation of the Scheme is conditional, amongst other things, upon: the adoption of the Transaction Agreement by Eaton Shareholders holding at least two-thirds of the outstanding voting shares of Eaton in a special shareholder meeting; the approval by the Cooper Shareholders and the sanction by the Irish High Court of the Scheme; the approval for listing (subject only to certain standard conditions) of the New Eaton Shares forming part of the Consideration; all applicable waiting periods under the HSR Act having expired or having been terminated, in each case in connection with the Acquisition; to the extent that the Acquisition constitutes a concentration within the scope of the EC Merger Regulation or is otherwise a concentration that is subject to the EC Merger Regulation, the European Commission having decided that it does not intend to initiate any proceedings under Article 6(1)(c) of the EC Merger Regulation in respect of the Acquisition or to refer the Acquisition (or any aspect of the Acquisition) to a competent authority of an EEA member state under Article 9(1) of the EC Merger Regulation or otherwise having decided that the Acquisition is compatible with the common market pursuant to article 6(1)(b) of the EC Merger Regulation; 5 The bases and assumptions for these synergy numbers are set out in Appendix I of this announcement. The synergies have been reported on in accordance with Rule 19.3(b) of the Takeover Rules, and the required reports will be mailed with the Proxy Statement. 10

11 all required regulatory clearances shall have been obtained and remain in full force and effect and applicable waiting periods shall have expired, lapsed or terminated (as appropriate), in each case in connection with the Acquisition, under the antitrust, competition or foreign investment laws of Canada, The Peoples Republic of China, Russia, South Africa and South Korea, The Republic of China (Taiwan) and Turkey; no injunction, restraint or prohibition by any court of competent jurisdiction which prohibits consummation of the Acquisition having been entered and which is continuing to be in effect; the Proxy Statement having become effective under the Securities Act and not being the subject of any stop order or proceedings seeking any stop order; the accuracy of each of the parties representations and warranties except generally as would not have a material adverse effect on such party; and the performance by each party of its obligations under the Transaction Agreement in all material respects. The Proxy Statement, containing further information relating to the implementation of the Acquisition, the full terms and Conditions of the Scheme, and the notices of the Court Meeting to be convened by direction of the High Court, the separate Cooper Extraordinary General Meeting required to approve the Scheme and related resolutions and information relating to the convening of the Eaton Special Meeting will be posted as soon as reasonably practicable after the date of this announcement, to Eaton Shareholders and to Cooper Shareholders. The Proxy Statement will contain important information about the merger of Eaton with and into a wholly owned indirect subsidiary of New Eaton (with Eaton as the surviving corporation), the Acquisition (including the Scheme, which will be included within the Proxy Statement), the Transaction Agreement, the Eaton Special Meeting, the Court Meeting and the Cooper Extraordinary General Meeting. The Proxy Statement will also be a part of a registration statement on Form S-4 filed with the SEC in order to register the New Eaton Shares pursuant to the Securities Act of Upon a declaration of effectiveness by the SEC, the Proxy Statement will constitute a prospectus of New Eaton. 7. SYNERGIES Eaton believes the acquisition of Cooper will provide the potential for meaningful synergies over time and that there is a significant opportunity to realize expected pre-tax operating synergies of $375 million and global cash management and resultant tax benefits of $160 million annually by The expected sources of the expected annual synergies are: potential sales synergies of $115 million per annum resulting from product packaging to common customers, improving channel sales, expanding service offerings and leveraging geographic strengths; potential cost out synergies of $260 million per annum resulting from efficiencies and economies of scale in the areas of supply chain, manufacturing, customer service, logistics and central and regional level expenses; and potential global cash management and resultant tax benefits of $160 million resulting from the combined companies being incorporated in Ireland with organizational, operations and capitalisation structures that will enable the combined company to more efficiently manage its global cash and treasury operations and recognise unutilized income tax deductions in certain jurisdictions. Eaton believes that it will achieve the run-rate on these synergies by In particular, Eaton believes that it will achieve $260 million in cost-out synergies with over 90% complete by Total acquisition integration costs of approximately $200 million are expected to be incurred through The bases and assumptions for these synergy numbers are set out in Appendix I of this announcement. The synergies have been reported in accordance with Rule 19.3(b) of the Takeover Rules. The reports required by Rule 19.3(b)(ii) of the Takeover Rules will be mailed with the Proxy Statement. 11

12 Subject to the Scheme becoming effective, Cooper Shareholders will be able to share in the synergies resulting from the acquisition of Cooper by Eaton through the share component of the Consideration. Synergies and Integration Costs ($ M) Pre-Tax Operating Synergies Sales Synergies Cost-out Synergies Total Operating Synergies Global Cash Management and Resultant Tax Benefits Acquisition Integration Costs, Pre-Tax The estimate of synergies set out in this document has been reported on for the purposes of the Takeover Rules by (i) Ernst & Young LLP; (ii) Citigroup Global Markets Limited; and (iii) Morgan Stanley & Co. Limited. Copies of their respective reports shall be mailed with the Proxy Statement. There are various material assumptions underlying the synergies estimate which might therefore be materially greater or less than estimated. The estimate of synergies should therefore be read in conjunction with Appendix I, which contains, among other information, certain key assumptions underlying the estimates. Neither the statements above nor any other synergy statement in this announcement should be construed as a profit forecast or interpreted to mean that New Eaton s earnings in the first full year following the Acquisition, or in any subsequent period, would necessarily match or be greater than or be less than those of Eaton and/or Cooper for the relevant preceding financial period or any other period. 8. INFORMATION ON EATON Eaton is a diversified power management company with more than 100 years of experience providing energyefficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power. With 2011 revenues of $16.0 billion, Eaton is a global technology leader in electrical components, systems and services for power quality, distribution and control; hydraulics components, systems and services for industrial and mobile equipment; aerospace fuel, hydraulics and pneumatic systems for commercial and military use; and truck and automotive drivetrain and powertrain systems for performance, fuel economy and safety. Eaton has approximately 72,000 employees and sells products to customers in more than 150 countries. Eaton Shares are traded on the NYSE under the symbol ETN. Citi and Morgan Stanley are acting as joint financial advisors to Eaton and Simpson Thacher & Bartlett LLP, A&L Goodbody and Matheson Ormsby Prentice are acting as Eaton s legal counsel. 9. INFORMATION ON COOPER Cooper is a diversified global manufacturer of electrical components and tools, with 2011 revenues of $5.4 billion. Founded in 1833, Cooper s sustained success is attributable to a constant focus on innovation and evolving business practices, while maintaining the highest ethical standards and meeting customer needs. Cooper has seven operating divisions with leading positions and world-class products and brands including Bussmann electrical and electronic fuses; Crouse-Hinds and CEAG explosion-proof electrical equipment; Halo and Metalux lighting fixtures; and Kyle and McGraw-Edison power systems products. With this broad range of products, Cooper is uniquely positioned for several long term growth trends including the global infrastructure build out, the need to improve the reliability and productivity of the electric grid, the demand for higher energy-efficient products and the need for improved electrical safety. In 2011, 62% of total sales were to 12

13 customers in the industrial and utility end-markets and 40% of total sales were to customers outside the United States. Cooper has manufacturing facilities in 23 countries as of Cooper Shares are traded on the NYSE under the symbol CBE. Goldman Sachs is acting as Cooper s exclusive financial advisor and Wachtell, Lipton, Rosen & Katz and Arthur Cox are acting as Cooper s legal counsel. 10. INFORMATION ON NEW EATON New Eaton is a private limited company incorporated in Ireland, solely for the purpose of effecting the transaction. Prior to the Effective Date, New Eaton shall be converted, pursuant to the Companies Acts, to a public limited company. To date, New Eaton has not conducted any activities other than those incidental to its formation and the execution of the Transaction Agreement. Simultaneously with and conditioned on the concurrent consummation of the Scheme, MergerSub, a wholly owned indirect subsidiary of New Eaton, will merge with and into Eaton, the separate corporate existence of MergerSub will cease and Eaton will continue as the surviving corporation. At the Effective Time, all Eaton common shares will be canceled and will automatically be converted into the right to receive New Eaton Shares on a one-for-one basis. At and as of the Effective Time, it is expected that New Eaton will be a publicly traded company listed on the NYSE under the ticker symbol ETN. 11. FINANCING Eaton has secured a $6.75 billion, fully underwritten bridge financing commitment from Morgan Stanley Bank, N.A., Morgan Stanley Senior Funding, Inc. and Citibank, N.A. to finance the cash portion of the Acquisition. Eaton plans to later refinance these bridge borrowings through a new term debt issuance, use of cash on hand, and the possible sale of assets. At the closing of the Acquisition, New Eaton will assume and guarantee the outstanding debt of Cooper. Further information on the financing of the Acquisition will be set out in the Proxy Statement. Citigroup Global Markets Limited and Morgan Stanley & Co. Limited are satisfied that resources are available to Eaton sufficient to satisfy in full the cash consideration payable pursuant to the Scheme. 12. DIRECTORS, MANAGEMENT, AND EMPLOYEES Pursuant to the terms of the Transaction Agreement, Eaton has given assurances to Cooper that the existing employment rights of all management and employees of Cooper will be fully safeguarded following completion of the Acquisition. Further details shall be included in the Proxy Statement. 13. COOPER SHARE PLANS Pursuant to the terms of the Transaction Agreement and the terms of the Cooper Share Plans, the Acquisition will accelerate outstanding options and awards under the Cooper Share Plans. Detailed proposals in respect of the Acquisition will be made to Cooper Equity Award Holders at or around the time of the posting of the Proxy Statement. 14. DELISTING AND CANCELLATION OF TRADING OF EATON AND COOPER AND ADMISSION TO TRADING OF NEW EATON It is intended that, subject to and following the Scheme becoming effective, and subject to applicable requirements of the NYSE, New Eaton will apply for cancellation of the quotation of Eaton Shares on the NYSE and the Chicago Stock Exchange and Cooper will apply for cancellation of the quotation of Cooper Shares on NYSE. The last day of dealing in Cooper Shares on NYSE and Eaton Shares on the NYSE and the Chicago Stock Exchange will be the last Business Day before the Effective Date. It is expected that New Eaton Shares shall commence trading on NYSE on the Effective Date. 13

14 15. EXPENSES REIMBURSEMENT AGREEMENT Cooper has entered into the Expenses Reimbursement Agreement dated May 21, 2012 with Eaton, the terms of which have been approved by the Panel. Under the Expenses Reimbursement Agreement, Cooper has agreed to pay all specific, documented quantifiable third party costs and expenses incurred by Eaton, or on its behalf, for the purposes of, in preparation for, or in connection with the Acquisition and related transactions in the circumstances outlined below. The liability of Cooper to pay these amounts shall arise only after the date of this announcement and is limited to a maximum amount equal to 1% per cent of the total value attributable to the entire issued share capital of Cooper under the Acquisition (excluding, for the avoidance of doubt, any interest in such share capital of Cooper held by Eaton or any Associate of Eaton) calculated on a fully diluted basis based on the closing price of a Cooper Share on the Business Day prior to the date of the occurrence of the relevant event set out below and exclusive of any value added tax payable, to the extent it is recoverable by Eaton. The circumstances in which such payment will be made are if: (a) the Transaction Agreement is terminated: (i) (ii) by Eaton for the reason that the Cooper Board withdraws, or any committee thereof (A) withdraws (or modifies in any manner adverse to Eaton), or proposes to publicly withdraw (or modify in a manner adverse to Eaton), the Scheme Recommendation or (B) approves, recommends or declares advisable, or proposes publicly to approve, recommend or declare advisable, any Cooper Alternative Proposal; or by Cooper, at any time prior to obtaining the approval of the Scheme by the Cooper Shareholders, in order to enter into any agreement, understanding or arrangement providing for a Cooper Superior Proposal; or (b) all of the following occur: (i) (ii) prior to the Court Meeting, a Cooper Alternative Proposal is publicly disclosed or any person shall have publicly announced an intention (whether or not conditional) to make a Cooper Alternative Proposal and, in each case, not publicly withdrawn at the time the Transaction Agreement is terminated under the circumstances set out in (b)(ii) below; and the Transaction Agreement is terminated by Cooper or Eaton for the reason that the Court Meeting or the EGM shall have been completed and the Court Meeting Resolution or the EGM resolutions, as applicable, are not approved by the requisite majorities; and (iii) a definitive agreement providing for a Cooper Alternative Proposal is entered into within 9 months after such termination; or (c) all of the following occur: (i) (ii) prior to the Court Meeting, a Cooper Alternative Proposal is publicly disclosed or any person shall have publicly announced an intention (whether or not conditional) to make a Cooper Alternative Proposal and, in each case, not publicly withdrawn at the time the Transaction Agreement is terminated under the circumstances set out in (c)(ii) below; and the Transaction Agreement is terminated by Eaton for the reason that Cooper shall have breached or failed to perform in any material respect any of its covenants or other agreements contained in the Transaction Agreement, which breach or failure to perform (A) would result in a failure of the conditions to the Scheme and of the conditions to any member of the Eaton Parties' obligations to effect the Acquisition and (B) is not reasonably capable of being cured by the date that is one year after the date of the Transaction Agreement, provided that, Eaton shall have given Cooper written notice, delivered at least 30 days prior to such termination, stating Eaton s intention to terminate the Transaction Agreement for such reason and the basis for such termination; and 14